Below is a list of prices for zero-coupon bonds of various maturities.

Maturity (Years)	Price of $1,000 Par Zero-Coupon Bond
1	$	978.14
2		893.66
3		807.34

a. What is the forward rate in the third year? (11 points)

b. Assume that the Treasury just issued a 9.7% coupon bond that will mature in 3 years. At what price will the bond sell? For simplicity, assume the coupon bond pays coupons annually. (9 points)

c. What is the yield to maturity on the coupon bond in part (b)?